(Solved by Humans)-You are to simulate cost behavior using probabilistic simulation
Paper Details
?You are to simulate cost behavior using probabilistic simulation (Monte Carlo simulation) and have been provided with the following cost estimates. Materials cost will range between $33 and $41 per unit, labor between $22 and $28 per unit, and utilities between $3 and $6 per unit. The probability distributions of cost per unit are as follows.
Materials:
? The probability is .21 that the cost will be $33. ? The probability is .20 that the cost will be $35. ? The probability is .32 that the cost will be $38. ? The probability is .27 that the cost will be $41.
Labor:
? The probability is .12 that the cost will be $22. ? The probability is .18 that the cost will be $23. ? The probability is .22 that the cost will be $24. ? The probability is .28 that the cost will be $25. ? The probability is .20 that the cost will be $28.
Utilities:
? The probability is .36 that the cost will be $3. ? The probability is .33 that the cost will be $5. ? The probability is .31 that the cost will be $6.
Task:
A. Complete the attached ?Simulation Template? to determine the following costs: 1. Average materials cost per unit
2. Average labor cost per unit
3. Average utilities cost per unit
4. Average total cost per unit
Note: Run 10 trials using the random numbers that are provided on the ?Simulation Template? for each probability distribution. Use the random numbers in the exact sequence that they appear on the template for each cost.
Note: Submit your completed spreadsheet as an attachment to this task.
B. Determine the selling price per unit that should be established for this product using your simulation results and assuming that the company wants to realize an average markup of $23 on each unit sold.
Trial
1
2
3
4
5
6
7
8
9
10
Total
Average
Random
Number
28
14
44
51
91
38
79
70
98
11
Materials
Cost
per Unit
________
Random
Number
21
50
90
71
10
11
70
16
88
67
Labor
Cost
per Unit
________
Random
Number
85
64
15
66
45
74
62
18
74
35
Utilities
Cost
per Unit
________
Total
Cost
per Unit
________
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STATUS
Answered
QUALITY
Approved
ANSWER RATING
This question was answered on: 10 May, 2025
Solution~000802207.zip (25.37 KB)
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